India needs 1,500 aircraft in 10 yrs

India will need nearly 1,500-2,000 aircraft in the next 10 years valued at $75 billion with air travel expected to grow at an average rate of 25 per cent in the next 10 years, said Union Civil Aviation minister Praful Patel at Bangalore on Thursday.

"The growth is on a lower base (less than 10 million people are flying) and so, will be high. This year, domestic travel grew by 50 per cent. Not long ago we were spectators to the world of aviation. Today, the clock has turned full circle and the whole world wants to know what's happening in India," said Patel.

He was speaking at the inaugural session of the International Conference on Aviation, organised by the Ministry of Civil Aviation, Federation Chamber of Commerce in India (FICCI) and Fornborough, at the Aero India Show in Bangalore.

"Not more than 10 million people are flying today. I wouldn?t be surprised if that number increases to 100 million in few years. Today, only 70 airports are served by air; this number will see a significant increase," said Patel.

He said the aviation infrastructure required to realise this dream is being put in place with the joint ventures in Mumbai and Delhi, and modernisation of 35 non-metro airports. Next, airports at Chennai and Kolkata will get modernised.

The government is upgrading the communications and navigation systems. "We are implementing the satellite-based communication systems, which will be a leapfrog in technology and put us in league with the US and Europe," said Patel.

The boom in air travel could get replicated in air cargo business. "India has only 6-7 cargo aircraft and big international cargo carriers take away all the business. The next 10 years could see addition of 500 cargo aircraft," said Patel.

The minister also said that the government is open to letting higher foreign direct investment (FDI) - the FDI cap in airlines is at 49 per cent - in non-scheduled operators like charters, helicopters, seaplanes and maintenance, repair and overhaul (MRO) ventures, first reported in Hindustan Times, last Sunday.

Speaking on the sidelines, Patel also said that we are trying to reduce the base prices for aviation turbine fuel, as reported in Hindustan Times on Monday.

The government may also extend the exemption of withholding tax on aircraft leases (which otherwise can increase lease rentals by 10-12 per cent). "We have taken up these issues with the finance minister," said Patel.